The car-building barrier has evolved from the ability to combine tens of thousands of parts and components into the ability to combine and run hundreds of millions of lines of code.
On June 30, at the SAIC Group’s shareholders meeting, Chen Hong, chairman of SAIC Motor, stated that it is unacceptable for SAIC to cooperate with third-party companies such as Huawei for autonomous driving.
An insider of SAIC told Shell Finance reporter that, as Chen Hong said, the core technology of autonomous driving is the soul of the future car, and SAIC must of course be in its own hands. However, cooperation also has huge room for win-win. “In fact, Chairman Chen Hong also said at the shareholders’ meeting:’We have a lot of cooperation with Huawei and Baidu. We have a lot of cooperation with Huawei in 5G, and there will be a lot of cooperation in the Internet ecosystem in the future.'”
In addition, Huawei also stated to the media that “the Huawei Inside model is currently only three, and it is impossible and lacking the energy to use this model with all car companies.” The other party said that Huawei Inside is the joint definition and joint development of cars by Huawei and car companies. It is not applicable. In all car companies. Huawei also provides component solutions, and more car companies are adopting this cooperation model.
However, Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Council, still told Shell Finance reporters that SAIC’s thinking is also the common thinking of vehicle companies. To achieve development, it is inevitable to have its own soul, core competitiveness, and independent self-improvement. .
“It’s like a company providing us with a holistic solution. In this way, it becomes the soul, and SAIC becomes the body. For such a result, SAIC cannot accept it. It must take the soul in its own hands. “At the recent SAIC Group’s shareholders meeting, Chen Hong said something amazing.
“In fact, many years ago, when the car giants faced the challenge of electrification, car companies almost agreed that even if they could not intervene at the battery cell level, at least the last battery pack and battery management must be done by themselves”, Auto industry analyst Zhong Shi told Shell Finance reporter that at the time, car companies believed that if battery giants were to provide a package of electric solutions, car companies would gradually become vassals of battery giants and could not stand at the top of the industry chain.
Zhong Shi said that because of this, when car companies have begun to transform to intelligence in recent years and encountered similar challenges, if car companies fully accept Huawei, Baidu and other autonomous driving or car-machine systems, it will be a challenge for car companies. Said, it is undoubtedly to drink poison to quench thirst, to be a walking dead without “soul”.
“If car companies choose this way, they may be called a car fashion design and manufacturing company, but this cannot conceal the fact that car companies are in a secondary position in the industry chain. Once this is done, car companies will not be in the value chain. The first one will be completely controlled by the companies that provide the “brain”,” said Zhong Shi.
In addition, Zhong Shi also reminded that when the car enters the highly intelligent and networked, the most precious continuous resource-user big data will be divided and used by technology companies, which is absolutely intolerable by car companies.
He recalled that SAIC had previously developed the “Zebra” car operating system, but this could only be used for its own use and cannot be used by other car companies. “In fact, all car companies are very taboo about technology companies controlling the most critical parts of their vehicles. If you really want to cooperate, at least car companies need to understand where the dividing line between the two parties’ user data and other data is.”
Electrification changes the original market structure, software gives new profit models to cars
Behind SAIC’s “rejection” of Huawei, the importance of software to automobiles has become increasingly prominent.
According to the Guosen Securities Research Report, today, the car-building barrier has evolved from the ability to combine tens of thousands of parts and components into the ability to combine hundreds of millions of lines of code.
The research report shows that the average single-vehicle value of automotive software has increased from US$200 for traditional vehicles to US$2,300 for new energy vehicles in 2025, and further to US$18,000 for new energy vehicles in 2025. The compound growth rate of the software market in the next ten years will be 9%. In 2030, with a space of 50 billion US dollars, 57% of the increase will come from ADAS and AD software.
During this period, the automotive software and hardware systems diverged.
Guosen Securities stated that in terms of software, the complexity of the internal functions of the controller has increased, and the new application software requirements of the smart cockpit have been superimposed, and the importance of software has become more and more prominent. 2010 (the number of hardware with slower growth rate vs. the number of software with rapid increase) and 2025 (hardware industry shaping VS software accelerated iteration to shape car differences) are two important watersheds in the development of automotive software and hardware.
In fact, Cui Dongshu also said that the wave of electric energy revolution is set off in various fields, and the automobile energy revolution is the key to promoting the sustainable development of automobile products. Automobile products that are free from energy constraints have more room for development and a wider range of uses.
Cui Dongshu further stated that automobile intelligence and electrification are not completely related, but that electric vehicles have relatively advantages in this regard in recent years, which has caused some misunderstandings. In fact, traditional fuel vehicles have relatively mature technologies in terms of autonomous driving and intelligence. Companies such as Toyota, BMW, and Volkswagen are all excellent representatives in this regard. Some domestic companies have also developed relatively early, but they have received less attention before.
“The advantage of electric vehicles is that it is easier to design bus control systems and facilitate integration,” Cui Dongshu said. However, electric vehicle brakes and other systems are also very closed. Intelligent data processing requires high-power calculations, and electric vehicles are easier to allocate power. As a fuss, it is necessary to establish a low-voltage power supply system with high redundancy and high power. Due to the relatively high power demand, the original 12-volt engine of traditional cars is not enough. It is necessary to add an independent power supply unit to ensure that the entire system has sufficient power.
He said that electrification is a revolution in the automobile industry because it has changed the driving method and product structure of automobiles. With the development of automobile electrification, major components such as engines and transmissions in the upstream of the industrial chain are replaced by components such as energy storage batteries, motors, and on-board chargers. About 50% of the fuel-fueled automotive parts market will disappear. In particular, the drastic reduction of car moving parts also ensures that cars can be transported more efficiently and reliably, get rid of the shackles of various maintenance, and achieve better applications at low cost.
Guosen Securities even predicts that under the current trend of automotive electronics and electrification architecture, software has room for diversified applications, and the profit model has not yet been finalized. New profit model.
And Cui Dongshu also believes that at present, the future growth and profits of the auto industry may come from more functions such as smart car services and applications. Manufacturing and selling cars is the basic work, and future derivative cars will be more close to the business model of the technology industry.
For example, he said that the current case of “the whole car is king” should be Tesla. With Model3, Tesla has completed the transformation to the civilianization and popularization of electric vehicles, and the level of Tesla’s models is more complete, and the complementary effects of the industrial chain are clear. The biggest feature of Tesla’s production and sales is its independence and self-reliance. With me as the core, it builds its own cars, designs its own software, designs its own chips, and builds its own super charging network.
“These new industries should be similar to the result of cooperation,” Cui Dongshu said. However, Tesla and Apple are both independent and independent, especially in the production of core technologies such as chips. The characteristics of self-reliance are obvious.
Over 8 big cooperation moves in 6 years
In fact, Huawei is not completely out of cooperation with SAIC. The reporter combed and found that in the past 6 years, Huawei and SAIC have cooperated more than 8 times.
On September 14, 2020, the “5G Smart Transportation Demonstration Zone” jointly created by SAIC, Huawei, China Mobile and Shanghai International Automobile City was officially opened to the public. This is the first autonomous driving experience park in China that is open to the public. The public feels the ease and convenience of smart transportation in advance. In the future, the four parties will deepen cooperation to build holographic perception and all-digital smart roads covering the whole area of Jiading, launch SAIC 5G smart cars in batches, form a hundred-level full-scenario pilot application scale, and build smart transportation networks, 5G communication networks and Beidou positioning networks The “Three Networks Convergence” model project will further build an internationally leading 5G+ smart car application highland.
On November 9, 2019, the world‘s first “5G+L4 intelligent driving heavy truck” officially launched its demonstration operation at Shanghai Yangshan Port. The 5G+L4 smart heavy-duty truck project jointly created by SAIC, Huawei, SIPG and China Mobile will effectively improve the operation efficiency, traffic efficiency, environmental protection level and safety level of the port area, create significant commercial and social benefits, and actively assist foreign companies. Shangang has accelerated its construction to become a world-leading smart port.
On September 16, 2019, SAIC, Huawei, China Mobile and Shanghai International Automobile City, members of the international 5GAA alliance, jointly announced that the world‘s first 5G smart transportation demonstration project will land in Jiading, Shanghai next year and be open to the public. The four parties will work together to focus on 5G interconnected communications, smart driving, smart travel, supporting infrastructure, and demonstration operation guarantees, and take the lead in piloting 5G intelligence based on human-vehicle-road collaboration in the “5G Smart Transportation Demonstration Zone” of Shanghai International Automobile City Driving and smart travel services to create an efficient, intelligent, safe and caring one-stop travel experience.
On April 18, 2019, SAIC Motor and Huawei signed a cooperation agreement to start the development of a software platform (SHP) for the entire automotive industry to realize remote upgrades of automotive performance, accelerate the iteration of digital updates of automotive products and services, and bring consumers the 5G era Rich scene experience of car mobile smart terminal.
On December 21, 2018, SAIC and Huawei signed a strategic cooperation agreement to jointly explore the construction of a smart travel ecosystem, promote the research and application of smart driving technology, and cooperate in smart electric, smart manufacturing, informatization, and network security. .
On June 28, 2017, SAIC, China Mobile, and Huawei signed a tripartite cooperation framework agreement at the Mobile World Congress Shanghai (MWCS2017) to jointly promote the development of smart travel services and the next-generation cellular car networking (C-V2X) industry.
On May 5, 2017, Huayu Automotive Systems Co., Ltd. (SAIC Group Holding Company) and Huawei held a smart manufacturing strategy signing ceremony, opening the door to the future of China’s automotive industry 4.0.
From November 2 to November 5, 2015, the Global Mobile Broadband Forum was grandly held in Hong Kong. SAIC Motor and Huawei partnered with Huawei to provide a real-car interactive experience and showcase integrated communication solutions based on LTE-V (LTE-Vehicle).
In addition, SAIC R cars have been equipped with Huawei’s Barong chips.
Today, Huawei has also vowed to say that it will not directly intervene in vehicle manufacturing.
On June 28, Chi Linchun, President of the BU Marketing and Sales and Service Department of Huawei Technologies Co., Ltd., said that Huawei does not build cars. On the one hand, Huawei’s ICT business has huge commercial interests in the European market. Cars will directly compete with local car companies. On the other hand, building a car requires huge capital, and Huawei currently does not have the strength to build a car. Chi Linchun said that Huawei will not control or invest in any auto companies, even 1%.
So, how does Huawei cooperate with car companies?
According to Huawei’s statement to the media, HuaweiInside is the joint definition and joint development of automobiles by Huawei and automakers. According to Huawei, there are currently only three HuaweiInside models, and it is impossible and lacking the energy to use this model with all car companies, and it is not applicable to all car companies. Huawei also provides component solutions, and more car companies are adopting this cooperation model.
However, Zhong Shi still said that even if Huawei is not involved in vehicle manufacturing at present, Huawei’s strategy is to be the Intel in the computer industry instead of IBM and DELL directly. This is the position that Huawei derives from its own technological advantages that it should occupy the most profitable position in the industry chain.
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